If you are an Amazon FBA (Fulfillment by Amazon) seller, then you probably know how much Amazon restock limits affect your business. Amazon restock limits restrict your store’s product quantity and storage, thus influencing how much of your store’s product you can sell at a time.
On January 1st, 2022, Amazon implemented new changes to the restock limits. In this article, we go over the following points:
- What are Amazon restock limits?
- How are restock limits different from storage limits?
- How to calculate your Amazon restock limits?
- What changes were made to the Amazon restock limits?
- How can you better manage your Inventory with restock limits?
- How to increase your Amazon restock limits?
- Frequently asked questions about quantity limits
Read on to find out how Amazon restock limits will affect your Amazon FBA business!
What are Amazon Restock Limits?
As mentioned earlier, Amazon restock limits basically restrict your entire store’s product quantity and storage. However, this didn’t used to be the case.
Before, Amazon used to only limit how many units you could have for each product listed. This meant that sellers could potentially have unlimited storage as long as they had different product listings and ASINs.
However, in April 2021, this all changed. Amazon started imposing account-wide restock limits instead of its former product-level limits. Now, instead of having a capped number of product units, Amazon now regulates the amount of inventory you can store at their fulfillment centers.
How are Restock Limits Different From Storage Limits?
While they are very similar, Amazon restock limits aren’t exactly the same as storage limits.
Basically, the two serve different purposes. Restock limits are designed to manage the inflow of inventory while storage limits determine how much physical space each seller gets in AMZ fulfillment centers.
While restock and storage limits are obviously related, it is important to know the difference between the two.
Essentially, Amazon restock limits dictate your maximum unit quantity and storage limits regulate the volume allocated to you in an FBA fulfillment center.
So, if you have a high restock limit but low storage limit, then you can sell smaller products in order to fit all the units in the restricted space.
How to Calculate Your Amazon Restock Limits?
While storage limits are determined by a seller’s Inventory Performance Index (IPI) score—which measures how efficient and productive the seller is in managing their FBA inventory—, restock limits are calculated based on various factors.
This includes but is not limited to your historical sales number, seasonal and peak selling periods of your products, as well as the forecasts for your ASINs and the new selections you carry. Essentially, it is determined by your forecasted demand at any given moment and thus can change throughout the year.
You can easily view your Amazon restock limits on the Seller Central platform by expanding the Restock Limits monitor at the bottom of the page.
Your Restock Limits monitor displays a lot of helpful information. While it can be confusing at first glance, it is important to be able to decipher the information and how it affects your store. We go over it all below.
Restock Limits Monitor
The first thing you see on the Restock Limits monitor is a bar graph that shows the maximum number of units your business can have as well as how much of that you are already using.
Under the bar, you can see your store’s utilization quantity, maximum inventory level, and maximum shipment quantity. These are all confusing terms, but they are actually quite simple once you know what they mean.
Your maximum inventory level is your restock limit. It’s calculated based on your past and forecasted sales and is adjusted by your fulfillment capacity.
Your utilization quantity is basically how much of that limit you are using, or the number of units you currently have in your current inventory and shipments to fulfillment centers. This includes your shipments with the Receiving, In Transit, and Working statuses. However, inventory pending removals and any reserved inventory are not included in the utilization calculation. To view the utilization by product type—such as standard-size or oversize— you can click to review your utilization by storage type.
Lastly, maximum shipment quantity is how many units you can ship to Amazon fulfillment centers at that given point. It is calculated by the maximum inventory level minus your utilization quantity.
What Changes Were Made to the Amazon Restock Limits?
On January 1st, 2022, Amazon made some changes to both restock limits and storage limits.
The IPI threshold for storage limits was reduced to 400, meaning fewer sellers will have storage volume limits.
Along with that, Amazon increased the restock limits during the holiday season to account for the popular period for sellers.
How Can You Better Manage Your Inventory with Restock Limits?
Down below, we go over some tips to help you best manage your inventory with Amazon restock limits.
1. Reduce utilization
Since your maximum shipment quality equates to your maximum inventory level minus utilization, reducing your utilization can help you have more room for new shipments.
You can do this by decreasing the amount of inventory you have in fulfillment centers or by canceling open shipments for products that you do not intend to send to Amazon.
A great way to keep track of your utilization is by looking at your store’s Shipping Queue. In the Shipping Queue, you can view or cancel any of your open shipments. All you have to do is click the shipment name (or View shipment or Track shipment), then select Cancel shipment or Delete shipment.
2. Restock popular products to increase sales and grow your business
As we mentioned above, increasing your sales leads to a higher restock limit. So, by restocking your popular products, you can sell them more and thus grow your business.
If you go to Restock Inventory on your Seller Central platform, you can view your recommended replenishment quantity for each SKU and restock them as soon as possible.
This tool is handy to help you plan how much inventory you should send to the Amazon FBA fulfillment centers and when to send them. These recommendations are shown in two columns: Recommended replenishment qty and Recommended ship date.
You are also able to see if your recommendations are within your Amazon restock limits by storage type!
3. Reduce your inventory in fulfillment centers
Probably the most straightforward of all the tips, reducing your inventory in fulfillment centers will allow you to have more capacity for more units.
There are a few simple ways you can do this.
First, you can increase your sales. Under Manage Inventory Health, you can view recommendations on how to increase your sales. This is a great tool as it can help you make the correct decisions about your excess and aged inventory. Along with that, you can use Multi-Channel Fulfillment to sell your inventory on other sales channels, such as your own website.
Secondly, you can request to have your inventory disposed of by creating a disposal order. You can do this under the Manage Inventory page.
Lastly, you can request to have your inventory returned to you by creating a removal order under the same tab.
How to Increase Your Amazon Restock Limits?
Now that we have gone over how to best manage your inventory with Amazon restock limits, it is only normal that we go over how to increase your Amazon inventory space.
Of course, every seller would want to increase their Amazon restock limits in order to best grow their business. However, with how fickle the restock algorithm is, how would you go about this?
With the restock limits being based on many variables—such as sales volume, your historical IPI scores, and their available fulfillment center capacity—there are really only two factors you can really control as a seller. We go over both below.
1. Sales Volume
In order to determine your restock limits, Amazon looks at your last 3 months of sales and calculates it based on that. Generally, the more you sell, the higher your restock limits are. So, by increasing your sales, you can also increase your limits.
Two easy ways to increase your sales are through Pay Per Click (PPC) ads and by driving external traffic. Along with this, you should always keep your most popular products in stock at the recommended levels to meet customer demand and maximize buyer satisfaction.
2. Inventory Performance Index (IPI) Score
As we said before, your IPI score affects both your Amazon restock limits and storage limits.
Don’t know what the IPI score is?
Simply put, your IPI score is a scale that Amazon uses to measure your inventory performance over time. Basically, it is a gauge of how efficient you are in managing your FBA inventory.
You can view your IPI score in the inventory Performance dashboard on the Seller Central platform.
There are many ways you can improve your score, which we go over down below.
Reduce your excess inventory
A key factor of a good IPI score is maintaining a balanced inventory level between on-hand and sold inventory. You want to avoid having stale inventory, meaning that you should try to sell your excess inventory as soon as possible. You should do everything in your power to make sure you don’t have overstock inventory just sitting at the FBA warehouse.
You can do this by either constantly changing your pricing strategy for your products to meet demand as well as reducing your inventory according to your sales history.
If you already have excess inventory, you use Amazon’s FBA Liquidations program, which helps sellers reduce their inventory through a wholesome liquidation company. Basically, you can choose to sell your surplus inventory to these wholesale companies for a fee, which then cannot resell them on Amazon.
Along with that, you can use the similar Amazon Outlet program to get value from stale inventory.
Improve Your Sell-Through Rate
The FBA sell-through rate is calculated by dividing the number of FBA units sold and shipped over the past 90 days by the average number of units in Amazon fulfillment centers during that period. You can improve your sell-through rate by constantly maintaining the right balance of inventory. For instance, make sure you only send in inventory that you can quickly sell and restock later.
Fix Stranded Inventory
Another large factor of your IPI score is stranded inventory. It is vital that you fix all your stranded inventory immediately otherwise your score may take a dive.
On Amazon’s Seller Central, you can find your stranded inventory report. To access this, you hover over the Inventory Tab and select Manage Inventory.
You should be checking your stranded inventory weekly if not daily to make sure your IPI score isn’t affected.
Frequently Asked Questions about Quantity Limits
Do my Multi-Channel Fulfillment orders affect my restock limits?
Yes! Your Amazon restock limits are based on your forecasted and past sales data, which includes Multi-Channel Fulfillment orders.
Will my FBA products still be subject to ASIN quantity limits?
Most FBA products will no longer be subjected to ASIN quantity limits. This includes products that fall under the Standard-size, Apparel, Footwear, and Oversize storage types. These types of inventory can be sent to Amazon within a storage type subject to restock limits.
Can I change the storage type of a product?
No. Sellers cannot control the storage types of their products. Storage types are given based on your products’ characteristics.
Can I switch Amazon restock limits for one storage type to another?
No. Like the answer above, storage types are determined by the product’s characteristics and sellers have no control over them.
Will Amazon change the inventory quantity limits again?
Most likely. It is possible for AMZ to change its restocking limits at any time. Just last year they changed them twice. While we don’t know when or if they will change the restock limits again, we suggest keeping an eye on the News section of your Seller Central account for any updates.
There you have it—everything you need to know about Amazon restock limits in 2022!
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